Auditing and Ethics · Audit Evidence

Audit Sampling (SA 530) for CA Intermediate

Updated 4 October 2026 · Fact-checked

Audit sampling means applying audit procedures to less than 100% of items in a population, so that every sampling unit has a chance of selection. The auditor designs the sample, selects items, tests them, projects misstatements to the population and evaluates whether the evidence is sufficient and appropriate. SA 530 governs this.

Understand Audit Sampling (SA 530)

Auditors rarely test every transaction. A company may have lakhs of invoices. Testing all of them is slow and costly. So the auditor tests a sample and draws a conclusion about the whole population. This is audit sampling under SA 530.

Sampling needs one condition: every item in the population must have a chance of being selected. If you pick only items you like, or only large items by choice, that is not audit sampling. Selecting all items, or selecting specific items on judgment (for example all items above a value), is also not sampling.

There are two approaches. Statistical sampling uses random selection and probability theory to evaluate results and measure sampling risk. Non-statistical sampling relies on the auditor's judgment and does not use probability theory to evaluate results. Either can give sufficient evidence if designed well. The choice is about cost and practicality, not about which is more reliable.

Two risks arise. Sampling risk is the risk that the auditor's conclusion from the sample differs from the conclusion if the whole population were tested. It can be reduced by increasing sample size. Non-sampling risk is any risk not due to sampling, such as using an inappropriate procedure, misreading a document or failing to recognise a misstatement. Better planning, supervision and review reduce it, not a bigger sample.

The auditor also separates tests of controls from tests of details. In tests of controls, the concern is deviations from a prescribed control. In tests of details, the concern is misstatements in amounts. The auditor sets a tolerable rate of deviation or tolerable misstatement, which links to materiality. The sample is then selected, tested, and the results are evaluated. If the sample does not give a reasonable basis, the auditor may extend the sample or perform other procedures.

Sample size drivers differ by test type. For tests of details, size depends on tolerable misstatement, assessed risk of material misstatement, expected misstatement and reliance on other procedures. For tests of controls, size depends on the tolerable deviation rate, the expected deviation rate and the level of assurance the auditor wants from the sample.

Key rules to remember

Projected misstatement (ratio method): Projected misstatement = (Misstatement found in sample ÷ Value of items in sample) × Value of population; One common way to project. Stratified or per-item methods may also be used. Compare the result with tolerable misstatement.
Sample deviation rate: Deviation rate = Number of deviations found ÷ Number of items tested; Used in tests of controls. Compare with the tolerable rate of deviation.
Sampling interval (systematic selection): Sampling interval = Population size (or value) ÷ Sample size; Pick a random starting point within the first interval, then select every nth item or monetary unit.
Sample size drivers: Tests of details: sample size increases when tolerable misstatement falls, assessed risk of material misstatement rises, expected misstatement rises, or reliance on other procedures falls. Tests of controls: sample size increases when tolerable deviation rate falls, expected deviation rate rises, or the assurance wanted from the sample rises; Higher tolerable misstatement or lower risk allows a smaller sample in tests of details. Higher tolerable deviation rate or lower expected deviation rate allows a smaller sample in tests of controls.
Risk comparison rule: Sampling risk ↓ as sample size ↑; non-sampling risk is not reduced by sample size; A frequent theory point.

How to solve Audit Sampling (SA 530) questions

Use this order for any SA 530 question, theory or numerical.

1Identify the objective of the procedure and the population. Check that the population is complete and relevant to that objective.
2Decide whether it is a test of controls or a test of details. This sets what you measure: deviations or misstatements.
3Set tolerable deviation rate or tolerable misstatement, using materiality, and consider expected errors and assessed risk.
4Determine the sample size and the selection method: random, systematic, monetary unit, haphazard, or block. Say whether it is statistical or non-statistical.
5Perform the audit procedures on each item. For items that cannot be tested, use alternative procedures or treat them as deviations or misstatements.
6Investigate the nature and cause of deviations and misstatements. Decide whether they are anomalies.
7Project misstatements to the population and compare with tolerable misstatement, or compare deviation rate with tolerable rate.
8Conclude whether the sample gives a reasonable basis. If not, extend the sample, perform other procedures or consider the audit report impact.

Quickest way: Compare and conclude in four moves

When to use it: Use this for numerical questions and short written answers where time is tight.

MCQ: if the option says a larger sample removes non-sampling risk, reject it. If it says statistical sampling is always better, reject it.
MCQ: remember that sampling needs every item to have a chance of selection. Selecting 100% or specific items is not sampling.
Numerical: write the ratio, then the projection, then compare with tolerable misstatement. Three lines earn the step marks.
Written answer: use the format Provision (SA 530 point), Facts (apply to the case), Conclusion (one line). Name the method and the risk involved.

Common mistakes in Audit Sampling (SA 530)

Saying statistical sampling is more reliable than non-statistical sampling.
Probability theory sounds more scientific.
Fix: State that both can give sufficient appropriate evidence if properly designed. The choice depends on cost and practicality.
Claiming a larger sample reduces non-sampling risk.
Students link size to all risks.
Fix: A bigger sample reduces only sampling risk. Non-sampling risk falls through proper procedures, training, supervision and review.
Treating selection of all items above a value as sampling.
It feels like a selection method.
Fix: That is selecting specific items. Sampling requires that all items have a chance of selection. Remaining items may still need sampling or other procedures.
Ignoring misstatements found in a sample because they look like one-off errors.
Students want to treat them as anomalies.
Fix: Treat a misstatement as an anomaly only when the auditor is highly certain it is not representative. Otherwise project it to the population.
Comparing the actual misstatement found in the sample with tolerable misstatement, without projecting.
The projection step is skipped under time pressure.
Fix: Always project to the population first. Then compare the projected figure, and consider the effect of uncorrected misstatements.
Dropping an item that cannot be tested, such as a missing document.
Students replace it with another item to keep the sample size.
Fix: Perform alternative procedures. If none is possible, treat the item as a deviation or misstatement.

Worked examples

Example 1

In a test of details, an auditor selects a sample of trade receivables with a book value of ₹20,00,000 from a population of ₹2,00,00,000. Overstatements of ₹40,000 are found in the sample. Tolerable misstatement for the population is ₹15,00,000. Project the misstatement and state the conclusion.

Show the solution

Misstatement rate in sample = ₹40,000 ÷ ₹20,00,000 = 2%.
Projected misstatement = 2% × ₹2,00,00,000 = ₹4,00,000.
Compare: ₹4,00,000 is below the tolerable misstatement of ₹15,00,000.
Also consider that projection is only an estimate with sampling risk, and that the auditor must still consider the nature and cause of the misstatements and any other misstatements found in the audit.
The auditor should ask management to correct the known misstatement of ₹40,000 and evaluate uncorrected amounts together with others.

Answer: Projected misstatement is ₹4,00,000, which is below tolerable misstatement of ₹15,00,000. The sample provides a reasonable basis for the conclusion on receivables, subject to evaluating the causes and the aggregate of uncorrected misstatements.

Example 2

Explain the difference between sampling risk and non-sampling risk under SA 530. State whether increasing sample size reduces each.

Show the solution

Provision: SA 530 defines sampling risk as the risk that the auditor's conclusion based on a sample may differ from the conclusion if the entire population were subjected to the same procedure.
Sampling risk can lead to two kinds of wrong conclusions. In a test of controls, the auditor may conclude controls are more effective than they are. In a test of details, the auditor may conclude no material misstatement exists when it does. Both risk the audit being ineffective. The opposite errors are concluding that controls are less effective than they are, or that a material misstatement exists when none does. These lead to additional work and make the audit less efficient.
Non-sampling risk is the risk that arises from factors not related to sampling. Examples are using an inappropriate audit procedure, misinterpreting evidence, or failing to recognise a misstatement or deviation.
Facts: increasing the sample moves the sample closer to the whole population, so sampling risk falls. A larger sample does not correct a wrongly designed procedure or a misread document.
Conclusion: sampling risk is reduced by a larger sample or better design. Non-sampling risk is reduced by proper planning, supervision, review and appropriate procedures.

Answer: Sampling risk comes from testing only part of the population and falls as sample size rises. Non-sampling risk comes from other causes such as wrong procedures or misjudgement and is not reduced by a bigger sample; it is controlled through planning, supervision and review.

Exam tips

Expect definition-based MCQs: sampling risk, non-sampling risk, statistical vs non-statistical, and which selection method is which. Learn the definitions word by word.
For numerical questions, show three lines: sample rate, projected misstatement, comparison with tolerable misstatement. Add one line of conclusion.
In written answers, name the method (random, systematic, monetary unit, haphazard, block) and say why it suits the case.
Link tolerable misstatement to performance materiality and sample size drivers. Examiners like this link.
Do not confuse sampling with 100% examination or with testing specific items. State the definition first when a case study hints at either.

Practice questions from Audit Evidence

Audit Sampling (SA 530) in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

Audit Sampling (SA 530): frequently asked questions

What is the difference between statistical and non-statistical sampling?

Statistical sampling uses random selection and probability theory to evaluate results and measure sampling risk. Non-statistical sampling relies on the auditor's judgment and does not use probability theory for evaluation. Both can give sufficient appropriate evidence if properly designed.

How do I decide the sample size in an audit?

For tests of details, sample size depends on tolerable misstatement, the assessed risk of material misstatement, the expected misstatement and the reliance on other procedures. For tests of controls, it depends on the tolerable deviation rate, the expected deviation rate and the assurance wanted from the sample. Lower tolerable limits or higher risk need a larger sample.

What is the difference between sampling risk and non-sampling risk?

Sampling risk arises because only part of the population is tested, so the conclusion may differ from testing everything. Non-sampling risk comes from other causes, such as wrong procedures or misreading evidence. A larger sample reduces only sampling risk.

What should the auditor do if a sample item cannot be tested?

The auditor should try alternative procedures to obtain the evidence. If that is not possible, the item is treated as a deviation in a test of controls or as a misstatement in a test of details. The auditor should not quietly replace it.